part of paper I Bond that says Series I Interest Ceases 30 Years from Issue Date

Series I Bond

The new I Bond rate is out. 1.3% fixed rate and 5.27% combination rate. The 1.3% fixed rate is the highest we have seen since 2007.

More riveting money information for you. The new I bond rate is out.  The combined rate is 5.27%.  The fixed rate is 1.3% which is a 15 year high. In addition to the fixed rate of 1.3%, the inflation rate is 3.94%.  This new I Bond rate is good for I Bonds purchased from November 1 through April 2024. So, if you purchased your limit of I Bonds for the 2023 calendar year already, you can still get this rate in early 2024.  However, I should mention, that you are not necessarily limited to $10,000 per year in I Bond purchases.  If you want to purchase more see the blog post Do You Want to Buy More I Bonds than the $10,000 Limit

Historically High Fixed Rate

The big news is the 1.3% fixed rate.  Recall our blog post for the last I Bond rate change in May I Bond 0.9% Fixed Rate is Decade High.   Now it is even higher.  It is the highest fixed rate since the May 2007 rate change.  I Bonds were introduced in 1988.  The rates are changed every 6 months, so that is 52 change announcements since then.  Only 12 of the 52 rates have had a higher fixed rate than 1.35%.  So this fixed rate is higher than what we have seen 77% of the time I Bonds have been in existence.  In case you are curious the fixed I bond rate has been zero roughly 30% of the time.

The Fixed Rate Never Changes

Another piece of good news is the fixed rate never changes as long as you own the bond. If you buy in the next 6 months you get the 1.3% fixed rate for the next 30 years as long as you keep the I Bonds. 

So, you will get 1.3% in addition to the inflation rate.  If we go back to savings accounts earning less than 1%, you still get 1.3%.  Remember in 2022 when the 9.62% I Bond rate crashed the Treasury Direct website?  If we see inflation like that again, you would get 10.92%.  This sounds like pretty good inflation protection. Anytime you can get a return that is over the rate of inflation you are coming out ahead.  The fixed rate on an I Bond is like a gift that keeps giving .. for 30 years.

New I Bond Rate 5.27% for Six Months

Although overshadowed by the news of the fixed rate, the new I Bond rate of 5.27% is good news too. That is up from the 4.3% that just ended.  It compares to current top Money Market rates.  It is locked in for 6 months.  The I Bond inflation rate changes every six months in November and May.  When the I Bonds you own reset depends on when you purchased them.   The rate changes for the I Bonds you own occurs every 6 months from the issue date of your bond.

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